K-12 Tax & Spending Climate: Wisconsin State budget preview leaves unanswered questions


Much of the state’s recurring deficit problems are due to short-term budget decisions made over the past 15 years. But revenue volatility has also played a role. During 1990-2000, annual growth in general purpose tax revenues (GPR) averaged 6.8%, and the average was still higher (7.0%) during 1995-2000. Even after the 2001 recession, state tax collections grew an average of 5.0% per year during 2003-2008. But that was followed by collections dropping 7.1% in 2008-09 and remaining stagnant the following year, despite tax increases.
How the 2011-13 budget ultimately fares depends in part on the revenue outlook. And the new forecast for 2010-13 shows tax revenues growing at annual (bars in graph above) and average (line) rates generally below the recent past. The table below provides forecast detail. Tax revenues are projected to grow 4.2% or less over the next biennium.